f. What is the regular payback period for these two projects?
Project A
	Time period	0	1	2	3	4	5	6	7
	Cash flow	(375)	(300)	(200)	(100)	600	$600	$926	($200)
	Cumulative cash flow	-$375	-$675	-$875	-$975	-$375	$225	$1,151	$951
Intermediate calculation for payback	100.000	100.000	100.000	100.000	100.000	62.50
Payback using intermediate calculations	4.62 years
Project B
	Time period	0	1	2	3	4	5	6	7
	Cash flow	-$575	$190	$190	$190	$190	$190	$190	$0
	Cumulative cash flow	-$575	-$385	-$195	-$5	$185	$375	$565	$565
Intermediate calculation for payback	100.000	100.000	100.000	100.000
Payback using intermediate calculations
	Payback using PERCENTRANK		Ok because cash flows follow normal pattern.
g. At a cost of capital of 12%, what is the discounted payback period for these two projects?
WACC =	12%
Project A
	Time period	0	1	2	3	4	5	6	7
	Cash flow	-$375	-$300	-$200	-$100	$600	$600	$926	-$200
	Disc. cash flow
	Disc. cum. cash flow
Intermediate calculation for payback
Payback using intermediate calculations
Project B
	Time period	0	1	2	3	4	5	6	7
	Cash flow
	Disc. cash flow
	Disc. cum. cash flow
Intermediate calculation for payback
Payback using intermediate calculations
	Discounted Payback using PERCENTRANK	3.98	Ok because cash flows follow normal pattern.
h. What is the profitability index for each project if the cost of capital is 12%?
PV of future cash flows for A:		$601.96
PI of A:			1.61
PV of future cash flows for B:		$781.17
PI of B:			1.36